Good morning, ladies and gentlemen. Thank you for joining the JAKKS Pacific Second Quarter 2012 Earnings Call with management. Today, JAKKS will review the results for the second quarter ended June 30, 2012, which the company released earlier this morning. On the call today are Stephen Berman, President and Chief Executive Officer; and Joel Bennett, Executive Vice President and Chief Financial Officer. Mr. Bennett will first provide an overview of the quarter and operational results, and then Mr. Bennett will provide detailed comments regarding JAKKS Pacific's financial results. Mr. Berman will then conclude the prepared portion of the call with highlights of product lines and current business trends prior to opening up the call for your question. [Operator Instructions] Before we begin, the company would like to point out that any comments made about JAKKS Pacific's future performance, events or circumstances, including the estimate of sales and earnings per share for 2012, as well as any other forward-looking statements concerning 2012 and beyond are subject to Safe Harbor protection under the Federal Security laws. These statements reflect the company's best judgment based on current market trends and conditions today and are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected in forward-looking statements. For details concerning these and other such risks and uncertainties, you should consult JAKKS' most recent 10-K and 10-Q filings with the SEC, as well as the company's other reports subsequently filed with the SEC from time to time. With that, I would like to turn the call over to Mr. Berman.

Thank you for joining us today. I'd like to start off by saying that we are very pleased with the selling of our products for the second quarter and year-to-date, and we are on track with meeting our guidance for the full year. We are working hard to bring high-quality and compelling playthings to market while tightly managing our business and increasing profitability. Highlights for our second quarter include strong sell-through of our Monsuno toys in the U.S. and the ongoing launches of the toy line and animated series internationally in the markets like the U.K., Italy and Australia. Our Winx Club dolls are off to a positive start, and our Big Wheel line launched at select major retailers in June and is already showing strong momentum. Disney Pixar's Brave topped the box office movie chart in its opening weekend, and our Dolls, Dress-Up and Role Play also are a hit at retail. Our Disguise costume division is heading into the Halloween season, with strong placement of our Spiderman, The Avengers, Power Rangers and Brave costumes, just to name a few. Beyond these product lines, our company outlook for the back half of this year is very optimistic. With our diversity, no one product will drive our year and we expect contributions to come from a broad range of products for all ages, including the Action Shot Video Cam and a strong lineup of evergreen products, including our Princess and Disney Fairy dolls, Dress-Up and Role Play based on the upcoming Disney entertainment and boys role play based on superhero licenses, such as The Avengers, Spiderman and Batman. Our international business continues its expansion headed by Monsuno, Disney and Cabbage Patch Kids international licensing and distribution deals. And just after our quarter end, we successfully completed our $80 million self-tender offer for 4 million shares of common stock at a price of $20 per share. I would now like to turn the call over to Mr. Joel Bennett to review our financial results for the second quarter of 2012, and then I will give a further update on our second quarter successes and discuss key brands with positive momentum going into the third quarter and beyond.

Thank you, Stephen, and good morning, everyone. Our results this quarter exceeded our top line expectations, with net sales for the second quarter 2012 of $145.4 million, up from $131.9 million reported in the comparable period in 2011. The reported net income for second quarter was $200,000 or $0.01 per diluted share, which reflects $1.7 million or $0.05 per diluted share related to financial and legal advisory fees and expenses associated with the letter of interest and activist shareholder activities. This compares to net income of $4.2 million or $0.16 per diluted share reported in the comparable period in 2011, which included $900,000 or $0.02 per diluted share of financial and legal advisory fees and expenses. Excluding these advisory fees and expenses in 2011 and 2012, the second quarter net income would have been $1.6 million or $0.06 per diluted share compared to net income of $4.8 million or $0.18 per diluted share in 2011. Lastly, in addition to the expected decline of $2 million in the 2011 THQ settlement payment, the company agreed to modify the payment terms related to the 2009 settlement agreement with THQ, whereby THQ paid $2 million of the $4 million originally due in the second quarter and will pay 2 installments of $1 million each in both the third and fourth quarter of 2012. This revision will have no impact for our full year, but lowered our second quarter earnings per share by $0.06 and will raise our third and fourth quarter results by $0.03 each in those quarters. Net sales for the 6 months were $218.8 million compared to $204.3 million in 2011. The net loss reported for the 6-month period was $15.7 million or $0.61 per diluted share, which included $3.1 million or $0.09 per diluted share of financial and legal advisory…

Thank you, Joel. Again, we are very pleased with the results of our second quarter of 2012 and feel positive about our prospects through the remainder of the year, including the ever-important holiday season with the initial success of Monsuno, Winx Club and Big Wheel and the broad placement of our wide range of products going into the fall 2012 year. There are some really terrific products in our portfolio and have both new and evergreen contributions coming across all JAKKS divisions this year. Let me begin with the key highlights and brands for the second quarter. First of all, Monsuno. We've been saying that we expect 2012 to be a great launch year for this brand, and things are really falling into place. The launch of Monsuno toys and the premier of the animated series globally have met the company's expectations to date. In the U.S., the newest wave figures and course, featuring new Monsuno characters, hit shelves in July and we're already seeing wave 2 of product positively impact overall rate of sale. Monsuno toys are currently in distribution at Walmart, Toys"R"Us, Target, Kmart, to name a few, as well as Amazon and Walgreens. This fall, distribution will expand to drug and grocery, discount value stores, clubs and specialty. A new slate of Monsuno episodes on Nicktoons kicked off with Memorial Day Monsuno Madness marathon, featuring back-to-back airings of the first 7 episodes. The new episodes debuted every Thursday through June and July, earning a strong ratings with boys 6 to 11 and 9 to 14, with repeat episodes throughout the week continuing to garner strong ratings and viewership. The new episodes Monsuno continues to air 7 to 10 times per week, as the Monsuno battle to the core game, continued to be the #1 game on nicktoons.com,…

[Operator Instructions] You have a question from the line of Ed Woo representing Ascendiant Capital.

I had a question regarding the increased EPS guidance. Is there any other factors that affected the guidance? Because it seems like with the reduced share count that the EPS guidance should have gone higher.

Yes, we also factored in expected financing. We used initially funds from Hong Kong. And to avoid repatriation taxes, we'll be undertaking a bank line -- a short term bank line. But there -- it was a -- about 15% of it had shares outstanding, but on a diluted basis, it was about 12%. So factoring the -- after your weighting of those 2 million shares and the estimated financing gets us to the $0.03.

Okay, but there was no other operational impact on your earnings guidance?

No.

Okay. And the other question I had is this JV that you mentioned, it sounds like it's very interesting, promising products. When do you think we may actually start to see products from it and how exactly is this JV being structured?

On this -- I'll start with your second question. The structure of the JV will not be disclosed because of the proprietary technology that it'll be not disclosed at this time. But we will be launching this with various partners during the international October Toy Fair -- Consumer Products Toy Fair. And at that time, you will be able to realize the breadth and depth of this technology. And again, it's proprietary, this technology. There's over 1,000 claims that had been issued through Dr. Soon and his various companies. So it's truly -- since the inception of this company, which myself and Jack cofounded, there has been nothing more groundbreaking that we have done that I believe will revolutionize not just our company but the actual toy business itself. At the same time, what we will been doing internally for JAKKS, we have an exclusive right with this technology with NantWorks as a partner to sublicense this technology to the correct partners that we feel are appropriate to use this technology in the future.

Does that include only the toy industry or does it include for any usage?

For JAKKS Pacific, it is strictly the toy industry, in which we are involved with. But that means it's a broad category. DreamPlay itself, the corporation, the structure, will be utilizing that technology throughout various consumer mediums, such as other consumer products, digital, television and so on.

Your next question comes from the line of Arvind Bhatia representing Sterne Agee.

Okay, couple of things here. One, I know you're not disclosing the amount of business you're doing with Monsuno today, but I would just like to maybe get some color on the domestic versus international mix? And should we be expecting Monsuno to become, say, about 10% of your business here in the coming year or 2? Just broadly, if you can put some brackets around how to expect revenue, how we should model this?

Well as you know, we, as -- for competitive reasons, not just for our competitors but also for retailers, we do not break out the percentage of any one specific category. But I will give you some flavor of Monsuno both in North America, call it U.S. and the international. It's growing. It's growing, I would say, rapidly. During the summer months, remember for majority of toy companies, things are a slow period, it's very seasonal. People are getting back to school. But the orders on hand and our forecast in-house through both U.S. and international is growing expeditiously. And the -- we had a very promising event through our partner Bandai in Japan and they're focused very strongly in Japan, which believe -- we believe and they believe will be probably the one -- the #1 boys toy properties in Japan. We also have extremely strong, promising new ventures in Korea. That's not just to say our international, call it, Western Europe and Eastern Europe business is growing. So we are extremely excited about Monsuno, and we're looking forward to the years ahead with it.

Okay. And then one question on this new joint venture you announced this morning. First of all, how long is this JV going to be for?

It's for a long period of time, but none of this will be disclosed until the definitive agreement is completed. But it's a very long partnership. It's not just a partnership between 2 companies. It's a partnership of friendship, which Patrick and I have a very strong relationship and a commitment, not just for the change in the way that people will interact with smart devices, but we also believe the world will be a better place with what we are doing together. I know that sounds kind of cliché, but if you look at Dr. Soon's past and background and his philanthropy and what he's done in different industries, that's truly where we're going. We have shown, on a confidential basis, this technology to various partners. And I will say that there has not been one individual or individuals that have not been flabbergasted or more amazed in what we have presented to them. So it's really groundbreaking. It really -- it's not just groundbreaking for JAKKS, but we're really on a path. In the next few months, people will realize how transforming this will be for JAKKS and for other companies.

So I think if you will be incorporating this technology into your upcoming products, are you creating specifically products to use this technology or is it going to be more, at least in the near term, just adding this to what's in the pipeline? Just help us understand how much of your business will incorporate this new technology, say, in the next...

Because of Dr. Soon's patented -- dramatically patented technologies, the same toys that we have today, we do not need to change at all in any way, from the toy itself to the package. So we will be implementing the technology throughout various segments of our business and becoming more and more throughout the next 2 years. But it's truly evident, we've known each other for 10 or 12 years, there's nothing more transformative than what we will be doing with his technology with our product and other people in our industry's product, as well as other consumables from what you see at retail to -- for the retailer themselves and what you see at products at home. And again, we'll be showing this in October, and obviously, the analysts and investors will be open to come out to see this revolutionary change.

Your next question comes from the line of Sean McGowan representing Needham.

I have a couple of -- sorry, I'm late, but a couple of questions here. Could you like characterize, I mean, maybe you covered some of this earlier so I apologize, but the deferment of the payment from THQ, a lot going on there with THQ. So how safe should we feel about that coming later in the year?

Very safe. They have a game launching in August, and we were happy to accommodate them and we believe that we'll collect as scheduled.

Is there anything that JAKKS is getting as compensation for making this accommodation, like additional payment or something? Something, something?

5 percentage interest.

Okay, all right. And you may have commented on this earlier as well, but can you characterize sell-through on Monsuno? How is it stacking up?

Well, we actually have just launched Series 2, which we have been waiting for. And it's just getting on the shelves. Series 2 is just launching, so it's not stacking up. Again, we also don't want to ship too much during the summer period as you've been in this industry for, let's say, 60 years even though I know you're not 60, Sean. That -- and we just don't want to ship too much but we have a dramatic amount of marketing and a lot of things going on with Nickelodeon or Nicktoons going into the fall season with all the new episodes so -- and international, we've actually had to build quite a few new sets of tools because of the demand that's happening there. And we're trying to manage the amount of tooling, our R&D cost. So it's going well and better as expected. And no one's asked about it, but while you asked about Monsuno, we launched the Winx Club and -- recently, and from our retailers' point of view and from JAKKS' point of view, the sell-throughs are well beyond what we ever expected. So that's off to an amazing start. Nickelodeon's done a tremendous job promoting it for over a year, and it's truly exciting. So it's something that we felt really strong about, but now we feel even stronger.

All right. And last question, and I can appreciate your excitement over the technology represented in the DreamPlay. But I lack vision, perhaps, so maybe you could give me an example of 1 or 2 toys where the technology would actually make the toy more fun. It's not that I can't think of it, I just don't -- you know a lot more about it than I do. So this -- there are many, many things I'm sure it can be used for. Can you give us a couple of examples?

Well, I'll give it -- it's very difficult because you're not here to be able to see it. But for many smartphone, a smart device, and let me use some examples. I have a 7 -year-old daughter and she watches TV on my iPad. She doesn't have an iPad, but she has the accessibility for an iPad. So those smart devices are what people are utilizing, and it's becoming more and more. And with these smart devices or your television or so on, you'll be able to actually, from an in-store experience, so while you're shopping with your children, you could actually ID the actual item at the retail shelf. You can actually see what that item is able to do actually at home while on the shelf. You can see -- again, nothing being done different to our product or packaging. You can see what other products are available that are conducive for the play pattern and you could make your whole room interactive. So from a -- use a normal, doll clothing or you could actually make a whole surrounding environment that just happens from the actual clothes itself. It could happen from a t-shirt. It could happen from a teapot, that you have a teapot that you put your smart device in, and it builds a complete environment and you could add to it. And every day, that actual image, based on the content holder or content provider, can change based off what they want. So I'll use an example of a poster that has, I'll use -- again, we have no agreements, like a Justin Bieber. You have a poster that you have on your wall or your child has on their wall, that Justin Bieber poster is a complete interactive poster that Justin himself can…

[Operator Instructions]

As there are no further questions, and I know there's many other conference calls today, we appreciate everybody on this call. Thank you for believing in us. We believe in our stockholders and our employees, and I look forward to the remainder of the year and the years to come. Thank you very much.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect and have a great day.